Unilateral Actions the Case of International Environmental Problems



2 NB1 2 NB 2
q1 aq1 q2

Since q1 and q2 are strategic complements, i.e.

2NB2

------ > 0

q1 q2

The second term is positive, and we have that

q2        2NB1

sign — = sign - ɔ ɔ .

a         ∂q1 a

And

q2

θ1 .


•     d 7ι        ∙

sign — = -sign
θ1

Changes in country 1’s costs, i.e. let a=c1.

Effect on q1.

q1       2NB1

sign — = sign ɔ ɔ .

a       ∂q1 a

Evaluate

2NB1

——— = - q 1 < 0, in our model.

q1θ1       1     ,

Hence,

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